AB 1386 amends California’s hospital definitions to treat perinatal services as a basic service for general acute care hospitals and charges the department with creating an approval process for hospitals that do not currently provide those services. The bill directs hospitals that lack perinatal services to submit a “perinatal service compliance plan” so the state can approve or deny their rationale.
The change raises the regulatory baseline for where pregnant patients can expect basic perinatal care and forces explicit planning from hospitals that have not offered those services. By building transfer agreements and financial demonstrations into required plans, the bill aims to document how hospitals will manage maternal-newborn needs when on-site services are absent.
At a Glance
What It Does
Designates perinatal services as a basic service for general acute care hospitals and requires the state department to adopt a process to approve or deny perinatal service compliance plans from hospitals that do not provide on-site perinatal care. The bill also preserves a limited exception for rural general acute care hospitals regarding surgery and anesthesia requirements.
Who It Affects
General acute care hospitals in California (including facilities classified as rural general acute care hospitals), the state licensing department responsible for hospital oversight, regional perinatal receiving hospitals, and patients seeking maternity and newborn services. Correctional treatment centers are explicitly referenced as able to provide perinatal services under existing rules.
Why It Matters
It shifts licensing expectations for maternal-newborn care, compelling non-providing hospitals to document either a path to add services or formal transfer arrangements. That can change patient routing, hospital finances, and the distribution of perinatal capacity—especially in rural and underserved regions.
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What This Bill Actually Does
The bill inserts perinatal services into the list of “basic services” that a general acute care hospital is expected to provide. Rather than immediately forcing every hospital to open a maternity unit, the statute creates a regulatory pathway: hospitals that do not provide perinatal care must produce a perinatal service compliance plan and submit it to the department for approval or denial.
The statute leaves the specific effective dates and administrative deadlines blank in the text, so the department’s forthcoming rulemaking will set the practical timetable.
The compliance plan must meet standards the department will establish. The bill identifies several explicit plan elements (maintaining written transfer agreements, demonstrating lack of financial capacity, and describing steps already taken to establish services) and gives the department authority to require additional items.
That combination makes the plan both a legal compliance document and a record of patient-safety arrangements—transfer logistics, financial rationale, and a timeline or description of attempted remedies.The bill treats rural general acute care hospitals differently in one narrow respect: they remain within the general acute care hospital definition but are not required to provide surgery and anesthesia services. The statute references legacy peer-group criteria to define which hospitals qualify as “rural,” tying the exemption to historical hospital peer groupings and bed-count/location thresholds.A less prominent but important change is that correctional treatment centers are listed among settings that may provide perinatal services, subject to the existing licensing framework for those facilities.
Finally, the bill delegates significant discretion to the department—both to set the deadline for plan submissions and to determine any “other requirements” that compliance plans must include—so much of the on-the-ground effect will depend on forthcoming department rules and guidance.
The Five Things You Need to Know
The bill adds perinatal services to the statutory list of “basic services” for general acute care hospitals (the text leaves the statute’s effective date blank).
Hospitals that do not offer perinatal services must submit a perinatal service compliance plan to the department for approval or denial once the department establishes the review process and deadlines.
The statute specifies at least three required elements for those plans: maintenance of written transfer agreements with perinatal-capable hospitals, a financial report demonstrating inability to establish services, and a description of measures already taken to establish perinatal services.
The department can require additional elements for compliance plans and will set the process and deadlines by regulation, creating substantial administrative discretion over approval standards.
Rural general acute care hospitals keep their classification but are explicitly exempted from the requirement to provide surgery and anesthesia services; peer-group and population criteria in the statute define which hospitals qualify as rural.
Section-by-Section Breakdown
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Perinatal services elevated to a basic hospital service
This subsection inserts perinatal services into the list of basic services a general acute care hospital should provide. Practically, that change alters the statutory baseline that licensing reviewers use to judge whether a hospital meets minimum service expectations. Because the bill does not itself specify an immediate operational mandate or a penalty scheme here, the primary effect is to create a presumptive standard that the department can enforce through licensing and condition-setting.
Perinatal service compliance plan: approval process and submission requirement
This provision forces hospitals that lack on-site perinatal services to submit a formal compliance plan once the department establishes an approval/denial process and a submission deadline. The provision lists three minimum plan components (transfer agreements, a financial incapacity report, and a description of actions taken) and reserves authority to the department to add other requirements. That mix creates a documented pathway for hospitals to justify temporary or permanent non-provision, but it also makes hospitals’ transfer arrangements and finances subject to regulatory review.
Rural hospital carve‑out for surgery and anesthesia services
The bill clarifies that rural general acute care hospitals remain within the general acute care category but are not required by the department to offer surgery and anesthesia services. The statute ties the rural label to historical peer-grouping reports and explicit bed- and population thresholds, which matters because eligibility for the exemption depends on technical classification instead of a fact‑by‑case rurality test.
Correctional treatment centers and perinatal services
The correctional-treatment-center subsection already allows these facilities to provide a range of services; the bill expressly includes perinatal services among the services a correctional treatment center may provide if approved by the department. That makes perinatal care administratively available in custodial settings that can meet the licensing standard, with the usual written service agreement and operational requirements applying.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Pregnant people and newborns in areas served by hospitals that will either expand services or formalize transfer networks — they gain clearer regulatory expectations and documented transfer pathways when local perinatal care is absent.
- Regional perinatal centers and receiving hospitals — they receive clearer, enforceable transfer commitments and documentation that could stabilize referral flows and planning for capacity and staffing.
- Maternal-health policymakers and advocates — the statutory change creates a lever to push for statewide minimum expectations and to track where perinatal coverage gaps persist.
- Rural hospitals that qualify for the surgery/anesthesia exemption — the statute preserves operational flexibility for facilities that cannot feasibly maintain full surgical suites, avoiding an immediate mandate that could be impractical.
Who Bears the Cost
- General acute care hospitals that currently lack perinatal services — they must prepare and submit compliance plans, maintain or negotiate transfer agreements, and potentially document financial incapacity, creating administrative and possible operational costs.
- Perinatal receiving hospitals — they may see increased transfer volume and face demands for more coordinated acceptance agreements and capacity management.
- The state licensing department — it will need staff and procedural resources to design the approval/denial process, review compliance plans, and adjudicate disputes without an explicit funding source in the text.
- Emergency transport providers and regional EMS systems — reliance on written transfer agreements could increase transfers and impose logistical and financial strain on ambulance and neonatal transport services.
Key Issues
The Core Tension
The bill pits the goal of expanding and standardizing access to perinatal care against the practical and financial limits of hospitals that cannot reasonably stand up maternity services: it aims to reduce maternal-newborn ‘blind spots’ by creating a regulatory expectation, yet that same expectation—enforced through documentation and review—can impose costs and operational strain that may push some hospitals to limit other services or depend on transfers, consolidating care in fewer centers.
The bill leaves several critical implementation questions unresolved. Key dates and deadlines are blank in the statutory language, so the department’s rulemaking will determine when plans must be filed and how quickly hospitals must comply.
That delay gives the department significant agenda-setting power but also creates short-term uncertainty for hospitals, receiving centers, and regional planners.
The statute requires hospitals to demonstrate “lack of financial capacity” to establish perinatal services but does not define the financial thresholds, acceptable forms of evidence, or the review standard. Without clear metrics, reviews could vary across regions and over time, encouraging defensive or over-conservative plan submissions.
Likewise, the department’s authority to impose “other requirements” on compliance plans creates potential for uneven administrative burden: two hospitals in similar circumstances might face different documentation demands based on discretionary interpretation.
Finally, the reliance on formal transfer agreements to substitute for in‑house perinatal services shifts risk rather than eliminating it: receiving hospitals may become choke points, transport systems could be taxed, and patients may still face access delays despite documented agreements. The rural carve-out helps prevent an impossible surgical mandate, but it also means some communities may remain without local perinatal capacity, relying instead on transfers that can complicate timely care.
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